Disney walks away from Netflix

Ausiliatrice Cristiano
Agosto 10, 2017

The current plan is for Disney and ESPN streaming services to be available for purchase directly from Disney and ESPN; in app stores; and from authorized pay-TV partners.

Disney's entry into a crowded subscription streaming market and the cost of technology to support its own online services could weigh on earnings, Wall Street analysts said. Shares of Netflix fell 3 percent. John Skipper, ESPN's president and co-chairman of Disney Media Networks, will manage the new ESPN-branded service.

"The media landscape is increasingly defined by direct relationships between content creators and consumers, and our control of BAMTech's full array of innovative technology will give us the power to forge those connections, along with the flexibility to quickly adapt to shifts in the market", said Robert A. Iger, the chairman and CEO of The Walt Disney Company.

As for Disney, this new service will become the home for Disney content for the United States and will offer subscription-based on-demand viewing of all of the company's latest movies from Disney and Pixar.

Last August, Disney acquired a 33% stake in that company, which is a spinoff from Major League Baseball Advanced Media, for $1 billion. The company hasn't said anything about its television series. Starz Entertainment in 2011 pulled roughly 1,000 films in the Starz catalog on Netflix at the time.

Disney's "family focused" films including the upcoming Frozen 2, Toy Story 4 and live-action Lion King will be available on its own streaming service, which will launch first in the United States and then globally. Disney CEO Bob Iger says they may not end up on his company's future streaming service, but we don't know if he means they'll appear on something else owned by Disney, or be licensed to other companies such as Netflix.

Disney said will end its distribution agreement with Netflix for subscription streaming of new movie releases, beginning with the 2019 theatrical slate. "Getting the balance wrong could upset cable companies and weigh on the price they pay Disney for ESPN".

Revenue in the April-June quarter eased to $14.24bn, down slightly from $14.28bn in the same period a year ago, but missing forecasts of a rise to $14.4bn.

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